Limited Liability Company (LLC)


articles of dissolution

document that formalizes the end of a corporation's existence

articles of organization

document created and recorded for the opening of an LLC

business structure

form a business takes, with characteristics addressing legal liability and tax considerations. These forms include sole proprietorship, partnership, corporation, and LLC.

C corporation

entity, formed under state incorporation statutes, that has separate status from its owners both legally and for federal and state tax purposes


business entity formed under state incorporation statutes. Corporations are separate legal persons from their owners (who are called shareholders).

escrow account

asset that a third party holds during the period in which two other parties are finishing a transaction

fiduciary duty

requirement or responsibility to work in the best interest of a person or organization

flow-through entity

business structure in which revenue stays in the business and only the partners or members are taxed on the revenue


responsibility for a wrongdoing or act

limited liability

agreement in which the owners of the corporation are not legally responsible for the debts and liabilities of the corporation beyond what they have invested in the corporation

limited liability company (LLC)

business entity that offers limited liability from or akin to a corporation and the tax status of a flow-through entity


in the context of a limited liability company, an individual or group that has partial ownership in the LLC

operating agreement

documentation of the guidelines for the internal functioning of an LLC; similar to bylaws for a corporation


two or more people who have joined together to own and operate a business for profit and share profits earned, losses taken, and costs paid to vendors

piercing the corporate veil

ignoring a limited liability structure and declaring that company members are personally liable for the business's debts or liabilities

professional limited liability company (PLLC)

special form of limited liability company in which all members hold a specific professional license or credential

S corporation

entity incorporated under a state law but treated like a partnership for tax purposes, thus avoiding double taxation


situation in which a fiduciary makes a decision on behalf of the corporation that benefits either that fiduciary or a person with whom they have a relationship

sole proprietorship

unincorporated business that is owned by a single individual

Uniform Limited Liability Company Act

set of standards for the regulation of limited ability companies to be voluntarily adopted by states